Objective, impartial advice for Property Investors and Landlords with a focus on the Edinburgh area

Tuesday, 14 March 2017

Edinburgh property investors – do you have a game plan?

Last Summer I was on holiday with family and
friends. We were staying on Tanera Mor,
one of the remote Summer Isles islands off Achiltibuie and Ullapool. It’s the sort of place you need to provide
your own entertainment and we played many, many board and card games! One of the board games we played was Monopoly
(the original one, not the fancy new ones you get with card readers) and I had actually
forgotten how much fun it was and secretly how competitive I am. Yes it’s just
a game but I had a game plan (buy everything I land on except the Stations and
the Utilities!).

Having a game plan is key when investing your
money in a Edinburgh property.

All landlords are different in the way they play the property game. Some
landlords prefer to accept a modest yield/return on their investment for an
increased certainty of finding a quality tenant. Other landlords are interested
in high returns, with a greater risk with regards to the quality of the tenant.
Before you start playing, it is a good idea to have a game plan.

For a low risk investment, you could buy property in the areas of Marchmount
and Newington which are perceived as being more desirable, where you may be
able to achieve an annual yield of around 4-5%.

If you don’t mind a slightly higher risk of
void periods or a more varied quality of tenant, you are likely to be rewarded
with a higher annual yield of 5-7%. This level of risk can be typically taken
with properties in Dalry and Gorgie, I am happy to discuss and outline specific
streets in these areas.

If you are after annual yields of 8% and
over, you could take more of a risk with properties in other part of Edinburgh,
for example in Sighthill and Craigmiller where a fair few tenants are relying
solely or mainly on benefits. Many
landlords shy away from these sort of properties because they ‘can’t be
bothered with the hassle’. However, they
are worth considering. Sure you can get
bad tenants that are on benefits but you can get bad tenants that are not on
benefits ..... and, as I have mentioned in a previous blog, far, far more tenants
are on housing benefit that you may think.
Do not get me wrong, there are specific risks with tenants who rely
solely or mainly on benefits – mainly around getting paid! – but I have proven strategies
to reduce these risks that I would be happy to share with you.

As always, if you would like to send any deals you have seen online over to me
or you would like to pop in and have a chat, then you can either email me on
news@thekeyplace.co.uk or call me on 0131 603 4570.

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About This Blog

This blog follows the buy to let market in Edinburgh. You'll find tips, guidance, and analysis that relates specifically to Edinburgh and you'll also find properties from all the estate agents in the city on here that may make decent investments.

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Robert Young

I operate The Key Place and if you're thinking of buying a property to let in Edinburgh, I'll be happy to advise or just offer a second opinion. I can be contacted on news@thekeyplace.co.uk, or 0131 603 4570.